Tablet Wars: Amazon Adds Apps to Kindle

Amazon has announced that it will open up the Kindle e-reader to third party developers, allowing applications, or what Amazon calls “active content”, to run on the device.

What kind of apps could run in the low-fi Kindle? Well, you won’t be getting Monkey Ball, but interactive books, travel guides with locations data, RSS readers and anything that brings text to the device would be a good candidate. This could even include magazine and newspaper subscriptions.

The key is the revenue split. Right now Amazon takes a big chunk of the selling price of Kindle e-books. The terms of the new Kindle Development Kit (KDK) specify a 70:30 split, with the large part going to the developer. This is the same as the iTunes App Store, which is surely no coincidence — with an expected e-reading Apple tablet announcement next week, Amazon may be showing its hand now to pre-empt Apple.

It might appear that Amazon is going head-to-head with Apple on this, but we see it a little differently. Apple sells hardware, and while the App Store brings in a nice chunk of change, it is there primarily to sell more iPhones and iPods. Amazon sells books, and the Kindle is a way to make sure you buy Amazon’s e-books. That’s why there is a Kindle app for the iPhone, and why there will be a Kindle app on the tablet: it benefits both companies.

“Active content” will certainly make the Kindle more compelling, especially against other e-readers, although it will also make the Kindle more distracting. One of the nice things about an e-reader is that you can’t use it to check your email every five minutes. Or perhaps you can. The KDK allows the use of the wireless 3G connection. If the application uses less than 100KB per month, the bandwidth comes for free. If it uses more, there is a charge of $0.15 per MB which can (and surely will) be passed on to the customer as a monthly charge.

This model could, interestingly, also make its way into Apple’s tablet. Instead of trying to sell us yet another data plan, the tablet could have a Kindle-style free 3G connection used only for buying iTunes Store content, with the bandwidth price built in to the purchase. That is just speculation, however.

What we are sure of is that the next year will be an interesting one, and the e-book is set to take off in the same way that the MP3 took off before it. The question is, who will be making the iPod of e-books? Given its relatively low price, its appeal to an older, book buying demographic and its ascetic simplicity, the surprise winner might actually be the Kindle.

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